HONG KONG – Hong Kong’s taxi industry scrapped a plan for 1,000 of its drivers to go on strike on Nov 22, after the government pledged to crack down more severely on illegal ride-hailing services threatening the trade.

Industry leaders “temporarily called off the strike” following officials’ offer of “an olive branch”, Mr Wong Yu Ting, chairman of the Hong Kong Tele-call Taxi Association, told local media late on Nov 21.

The strike had been aimed at drawing attention to the government’s inaction against app-based services like Uber, Mr Wong said.

It was also to express cabbies’ unhappiness over a government-proposed demerit-point system to penalise them for refusing hires, overcharging passengers and other forms of misconduct, he added.

The difficulties faced by the taxi trade have received little public sympathy. Instead, reports of the planned – and now scrapped – strike drew a barrage of criticism over Hong Kong cabbies’ service standards.

Mr Alex Liu, managing partner of Hong Kong law firm Boase Cohen & Collins and a panel chairman of the city’s transport tribunal, said: “Unfortunately, the taxi service in Hong Kong has a poor reputation.

“Many customers have first-hand experience of drivers being rude, overcharging, cherry-picking passengers, or taking circuitous routes. There are also concerns over safety, given widely reported accidents involving elderly drivers. Hence, the lack of public sympathy and rising number of complaints.”

Online, Internet users echoed Mr Liu’s views.

“It’s a bit challenging to feel overly sympathetic to taxi drivers when they refuse to adopt electronic payments, there’s an insufficient number of taxis during peak periods, and their HK Taxi app allows them to pick and choose fares, and clients have to resort to bribes,” netizen Josh Lynch wrote on social media platform X.

On Reddit, one user advised cabbies to “examine your own poor service before criticising Uber for stealing your job”.

“Perhaps if the taxi drivers… were polite, professional, and got you to your destination via the most efficient route safely, then ride-hailing services wouldn’t be an issue… It’s time the Hong Kong taxi industry stepped up, and if it can’t, it should step aside,” reader Leslie B. wrote in response to a South China Morning Post report online.

And upon hearing news on the night of Nov 21 that the planned strike had been called off, another X user quipped: “But the taxi association did a great job of uniting Hong Kongers in their shared frustration of the taxi industry. All was not lost.”

Cabs losing out to Uber

Hong Kong’s cabbies have long been notorious for their poor service attitudes. A 2023 survey found that rudeness topped the list of complaints against the city’s taxi drivers.

It is common for them to refuse rides if the requested destination is not to their liking. They have also been known to demand exorbitant fares from unsuspecting tourists or during inclement weather.

They are also falling into obsolescence, as most taxis in Hong Kong accept only cash. Lawmakers’ calls in recent years to get the vehicles outfitted with digital payment systems have been met with strong resistance, as the cabbies seek to avoid taxes and their industry leaders demand that the installation charges be passed on to passengers.

Taxi drivers, especially elderly ones, have also been criticised for being a road safety hazard. Taxis were involved in one out of six traffic accidents in the first eight months of 2023 – the most of any form of public transport – according to government data.

Of the more than 4,000 taxi accidents in 2022, nearly half involved cabbies aged 60 or older. Some 55 per cent of Hong Kong’s more than 200,000 taxi licence holders are at least 60 years old. About 12 per cent are aged 70 or older.

In the years following the advent of ride-hailing apps, the taxi industry’s rivals like Uber have been able to gain a firm – and increasing – foothold in the market as people flocked to alternatives that offered a more pleasant, convenient and safer experience.

Uber, which entered the Hong Kong market in 2014, now boasts a fleet of over 14,000 drivers. It acquired popular cab-hailing app HKTaxi in 2021, and subsequently allowed riders to book cabs through the Uber app.

The taxi industry has accused Uber of costing it HK$20 million (S$3.4 million) a day in revenue.

Licences a lucrative investment

But private car-hailing services remain illegal in Hong Kong, unlike in most other Asian countries including Singapore, Malaysia and mainland China. Uber drivers who do not possess a taxi licence flout the law if they pick up rides.

Uber thus operates in a legal grey area, despite having a high-profile presence, office space and a large team of employees in the city, Mr Liu said.

“In my view, Hong Kong’s lucrative taxi licence system is the main reason that is keeping private car-hailing services illegal,” said an Uber driver who wanted to be known only by his initials MK.

The city has around 18,000 taxi licences without expiry dates that are traded privately at high premiums; at its peak, the price reached HK$7.66 million per licence in 2013. Though prices have fallen in recent years, a licence for a city taxi has still been trading at around HK$3.6 million over the past month.

Businesses and individuals who buy these licences as an investment product typically turn them over to taxi-management firms, which, in turn, rent them to drivers to generate income.

But the taxi licence system is not the only reason keeping services like Uber’s illegal.

Mr Liu said: “The taxi lobby is powerful and has close connections with the authorities, so there are vested interests. Hence, there is a lack of political will to tackle the core issue, which is the urgent need for wholesale reform of our personalised point-to-point transport industry.”

In Singapore’s case, Mr Liu said, “the Government understood that ride-hailing complemented traditional taxis and was in the best interests of commuters, so it acted quickly and decisively in legalising such services”.

“In contrast, Hong Kong hesitated, which has allowed the taxi industry to become more organised and deeply entrenched in its opposition. Thus, the issues have become harder to resolve over time.”

The legality of Uber-like services aside, consumers appear to be voting with their feet.

“At present, it is widely accepted that a citizen is not breaking the law in using a ride-hailing service, but the driver is. (So) the public will continue using Uber and other such services,” Mr Liu said.

“Citizens have shown they are prepared to pay a premium for better cars and drivers, full digital immersion from booking to credit card payment to driver reviews, and greater convenience.”